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12. The tax system Provisions of the U.S. Tax Code for Corporations and Individuals In general, is the U.S. federal tax system progressive or
12. The tax system Provisions of the U.S. Tax Code for Corporations and Individuals In general, is the U.S. federal tax system progressive or regressive? Progressive Regressive The applicable tax rate for S corporations is based on the: Stockholders' individual tax rates Corporate tax rate Cold Goose Metal Works owns 85,000 shares in the Fat Fox Smelting Corp.. If Fat Fox Smelters has 100,000 shares of common stock outstanding, can Cold Goose file a single income tax return that reports the incomes and expenses of both companies? Yes, because Cold Goose Metal Works's ownership stake in Fat Fox Smelters is greater than or equal to 80%, as required by the U.S. Tax Code. No, because Cold Goose Metal Works's ownership stake in Fat Fox Smelters is less than or equal to 49%, whereas 50% or more is required by the U.S. Tax Code. Yes, because Cold Goose Metal Works's ownership stake in Fat Fox Smelters is greater than or equal to 60%, as required by the U.S. Tax Code. Assume that the tax rate on corporate taxable income up to $50,000 is 15%, and 25% for income levels between $50,001 and $75,000. If the Clumsy Chihuahua Music Company has a taxable income of $59,000, then it has a tax liability of and an average tax rate of
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